22nd September 2016 at 4:30pm
As someone who has graduated and emerged in to the big bad world of employment not so long ago, I have recent exposure to trying to manage money as a student.
Throughout my four years studying I didn’t take out an independent loan, or succumb to the charms of the pay day lender.
But from delving in to recent statistics it seems my situation is most definitely not the norm. According to research conducted by the University of Sheffield and Comparethemarket.com one out of every nine students squanders their full terms loan of around £2,700 in just two weeks!
It’s no wonder these newly free teens find themselves in this situation, with money in their pocket and a social life to keep up. After all a night out is far more appealing than a night in with some poorly cooked pasta for company.
But it seems that those entering this new stage in their lives have good intentions to begin with, as Dr Thomas Webb, a social psychologist from the University of Sheffield explains; “They go into the year with good intentions to spread their money out, to make it last, make sure they eat healthily – and they feel confident about doing so. But the research indicates, and a lot of anecdotal information suggests, that students really struggle and get into debt.”
Students really struggle and get into debt – Dr Thomas Webb
So what can these struggling students do in order to stay financially stable and not come calling to the bank of mum and dad, or worse get in to debt?
It seems to me that the age old saying of ‘failing to prepare is preparing to fail’ applies here. So why not take a look at our top tips for prepping financially both before and during term time. Time to become a financially savvy student!
Pre term time tips
Pick the right bank account
It’s easy to be lured in to the bankers hands with freebies such as rail cards and travel discounts but don’t be easily influenced! Do the maths and check that these perks are financially beneficial to you, otherwise what’s the point?
Don’t be easily influenced by freebies.
If you have a regular income from part time work then consider accounts which pay interest on balances, make the money you work hard for, work for you!
Take a look at the Telegraph’s guide to the best bank accounts for students and see which is right for you.
Compare Compare Compare
We are living in the age of the comparison website, it’s now easier than ever before to get the best deal on a range of services. Make sure you compare energy tariffs, internet providers and mobile phone deals.
We live in the age of the comparison website
Ignorance can make you pay though the roof and this is a fool proof way to ensure you get the right deal for you.
Apply for a Council Tax Exemption
Apply for a council tax exemption, as a student you don’t need to pay council tax. Make sure you do this early to avoid any worrying warning letters. You can apply via the Gov website.
Ensure you insure your prized possessions
Laptops, printers, mobile phones and tablets are common staples of the dorm room nowadays and are easy fodder for those with light fingers. Insuring your possessions is essential to feeling safe and secure within your new surroundings.
Remember to insure your possessions
Do a trial run
Budgeting and understanding the costs of living independently can be overwhelming, and making sure you understand the various costs you will have to cough up for is paramount. Look at your projected income and work out realistically how much money you will need to go towards housing and amenities. Sit down with your parents and talk it all through, why not tag along on a supermarket trip too so you can see how much a weekly shop would actually cost.
Are you a parent or guardian and have children going off to University this year? Here are some useful tips for you on how to save money at university.
Top tips for throughout the year
Stick to your budget
Budgeting is boring, let’s face it, but it is essential for financial stability throughout the year. Make sure you stick to the budget you have worked out and ensure you can cover your outgoings comfortably. And if you can’t, it may be time to seek part time work if you have not already, which brings me on to my next point…
You can work AND be a student at the same time
Throughout my four years at university I worked alongside my studies, at first this wasn’t because I wanted to, it was because I needed to.
Student loans often don’t cover the rising costs of accommodation and living, and so part time work’s a life saver for many. Working was a necessity for me, but I soon began to enjoy it as I relied upon myself for extra money which allowed me to have a great social life and stable cash flow.
Many students work whilst studying
If trouble strikes, do NOT turn to the pay day lender
Though you may try your hardest to budget and get the best prices for your amenities, unexpected costs can crop up. If you find yourself in this situation and strapped for cash, pay day loans can be an easy option, but can have terrible consequences. Shelly Asquith of the National Union of Students warns;
“I would definitely warn against going down the path of payday lenders and loan sharks. There are a significant proportion of students, based on our own data, who are accessing these loans and it is obviously very high risk, with a high level of interest,”
A significant proportion of students access loans with a very high level of interest – Shelly Asquith
If this happens to you, seek the advice of a university adviser. In my experience they can be very helpful and detail your options to you without suggesting you fall in to the hands of a loan shark.